1. Expected Value & Expected Utility (7 points). Consider the following three lotteries: X p(x) 6 0.5 10 0.5 y p(y) Z p(z) 3 0.25 3 0.25 9 0.25 7 0.25 10 0.5 11 0.5 a. Find the expected value of each lottery. (3 points) b. Assume that an individual's utility function of final wealth is u(w) = w-0.01w. Cal- culate her expected utility for each lottery when she has riskless assets of 5. Rank the three lotteries from best to worst for this individual. (4 points)